Laurence Gluck, Independence Plaza North

Manhattan landlord Laurence Gluck illegally deregulated rents for tenants at Tribeca’s Independence Plaza North while simultaneously receiving J-51 tax breaks from the city, a state Supreme Court judge ruled yesterday, taking a page out of the book on Stuyvesant Town and Peter Cooper Village, where a similar ruling was handed down last year. At the 1,331-unit IPN, at 80 N. Moore Street, Gluck facilitated the complex’s exit from the state’s Mitchell-Lama rent-stabilized housing program in 2004 and subsequently jacked up the rents, according to Crain’s. The tenant-led suit argued that Gluck should not have been allowed to raise rents while still receiving tax breaks from the city. Yesterday’s ruling reverses a March state decision that said the rent increases were justified because Gluck repaid the city for the tax breaks when he discovered that they would be problematic. While Gluck is likely to appeal the decision on the five-year-old lawsuit, it represents the latest in a string of setbacks for the landlord, who lost his massive Riverton Houses complex in Harlem to foreclosure earlier this year after failing to convert its 1,230 rent-regulated apartments to market-rate rentals. [Crain's]

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2 Rector Street

Following the joint venture between Stellar Management and Savanna to recapitalize 2 Rector Street earlier this month, Stellar, together with Cushman & Wakefield, launched a new marketing and development plan today that will reposition and re-tenant the Financial District office tower. The plan calls for the development of high-end prebuilt units ranging from 3,500 square feet to 17,945 square feet and will also incorporate free architecture consultations, turnkey services for new tenants and major upgrades such as new bathrooms, window repairs, heating system upgrades and facade improvements. Larry Gluck, Stellar’s founder, said that his company is prepared to be competitive on pricing and that they expect the units to move quickly. Stellar acquired the 430,000-square-foot, 26-story office tower in 1997. Current tenants include Daniel Libeskind, Skanska, Bank of America, Merrill Lynch and law firm Morris Duffy Alonso & Faley. TRD

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2 Rector Street (source: PropertyShark)

Stellar Management and Savanna Real Estate Fund have successfully
recapitalized the Lower Manhattan office tower located at 2 Rector
Street. The price was undisclosed, although sources told the Post it
was close to $10 million. Stellar acquired 2 Rector Street in 1997. The
430,000-square-foot, 26-story building occupies the full block front on
Rector Street between Greenwich Street and Trinity Place. The
recapitalization, which effectively recasted the mortgage, puts a
structure in place that provides for the bu [more]

Property manager and developer Rose Associates has been named the exclusive managing agent for the Riverton Square apartment complex in Harlem, as The Real Deal first reported as a likelihood last month. The 1,230-unit complex, which is located between Fifth Avenue and the Harlem River and runs between 135th and 138th streets, is infamous for the rise and fall of its former landlord, Lawrence Gluck, who bought the property for $135 million in 2005 and refinanced it with a $225 million mortgage. The complex’s title was sold to special servicer CWCapital Asset Management at auction March 11 for $125 million. Jeffrey Heifetz, managing director with Rose Associates, said that cooperation with tenants will be of paramount importance to the company. “We are currently in the process of evaluating services at the property and identifying ways to enhance resident satisfaction,” Heifetz said in a written statement. “We look forward to maintaining a dialogue with residents and community leaders.” As manager, Rose will be responsible for the day-to-day management and upkeep at the 13-building, 12-acre complex. TRD

Riverton Houses, Steven Sinatra (top) of Greenberg Traurig, and Howard Comet (bottom) of Weil, Gotshal & Manges

Update (1:50 p.m.): David Bistricer’s Morgan Capital was the other bidder. Comments regarding and from Bistricer added.

Special servicer CWCapital Asset Management won the bidding this
morning to take title to the Riverton Houses in Harlem at a price of
$125 million, following a short bidding war with an attorney
representing a company controlled by real estate investor David Bistricer, called Morgan Capital. About 75 people, including brokers, potential buyers and residents of
the 12 13-story apartment buildings, attended the brief auction in the rotunda of the State Supreme Court building at 60 Centre Street. The property has a loan with a judgment valued at $240.6 million that is held in a
commercial mortgaged-backed security. CWCapital is the special servicer
for the loan.
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The W Hotel

The Moinian Group is negotiating with lenders after defaulting on a collateralized $25 million mezzanine loan last October, backed by the W New York Downtown Hotel & Residences, The Real Deal has learned.

Fitch yesterday downgraded a $942 million collateralized debt obligation issued by Realty Finance, a Rocky Hill, Conn.-based lender. Two of the three largest loans in the pool were backed by the W New York and the Riverton, a 1,230-unit multi-family complex in Harlem.

Moinian, led by developer Joseph Moinian, defaulted on the loan amid budget problems and construction delays, according to Fitch. Fitch said it “modeled a full loss on this highly-leveraged mezzanine loan,” however the ratings agency told The Real Deal that Moinian is currently negotiating with CW Capital Asset Management, the special servicer on the loan.

Moinian confirmed through a spokesperson that he is in talks with CW Capital and said he is continuing to make interest payments.

“No action has been taken against them and they are continuing to work with the special servicer to arrange new terms,” the spokesperson said in an e-mailed statement. [more]

The long-awaited $240.6 million foreclosure auction for the Riverton Houses complex in Harlem will be held March 11, according to an advertisement published this weekend in the New York Times. The auction will take place in the Rotunda of the State Supreme Court building at 60 Centre Street at 11 a.m., the notice said. A New York State Supreme Court judge ordered the complex to be sold at auction earlier this month, but the date was not given at the time. The amount of the judgment was set at $240.6 million, although a recent valuation for the property said it was worth just $108 million. Laurence Gluck bought the 12, 13-story buildings that lie between 135th and 138th streets and Fifth Avenue and Harlem River Drive, for $135 million in 2005, then refinanced the property with a $225 million mortgage. [more]

Infamous landlord Larry Gluck is in hot water again. His
company, Stellar Management, which owns the Riverton Houses in Harlem,
faces imminent default a loan on a Silver Spring, Md. residential
development. The 890-unit Georgian Towers had just undergone a $35
million renovation when its $58 million loan went to a special
servicer. This spells bad news for Gluck, who recently refinanced
Riverton Houses with $225 million of mortgage debt, only to see the
complex later appraised at $52 million, putting it deep underwater.

U.S. commercial mortgage-backed securities saw another monthly jump in the rate of delinquencies in October, according to data from Fitch Ratings, with Larry Gluck’s $225 million loan, collateralized by the Riverton Apartments in Harlem, clocking in as the largest newly delinquent loan, even though it was transferred to a special servicer over a year ago. Gluck, however was not alone. Late-pays on all CMBS jumped 3.86 percent since September. Office properties saw the biggest jump in delinquencies out of the different types of commercial properties tracked, with 19.4 percent more recorded in October than the month before. Overall, hotel properties saw the greatest percentage of mortgage defaults, with 6.81 percent of hotel property loans going into default, according to the report. TRD
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As rating agencies have slashed the value of bonds tied to securitized commercial real estate loans nationwide, some loan servicers are taking a harder look at the value of their assets and finding they are worth a lot less. Loan servicers reported more appraisal reductions for New York City properties last month than in the preceding eight months combined, data from mortgage tracking firm Trepp showed. The firms that manage troubled loans in commercial mortgage-backed securities, known as special servicers, reported in September appraisal reductions for 11 properties, reflecting a total reduction of $150 million that month, the firm reported. In the previous eight months, there were only three properties that showed a total reduction in value of $15 million; and there were no appraisal reductions published in the first eight months of 2008, Trepp reported. [more]